The South Carolina hospitality tax is a local tax of up to 2% on prepared meals and beverages, imposed by individual counties and municipalities through their own ordinances. If you run a restaurant, bar, café, food truck, or any establishment selling food and drink for immediate consumption in a jurisdiction that has adopted the tax, you collect it from customers and remit it to the local revenue office. Rates, filing schedules, and penalties are set locally, so the specifics depend on where your business sits.
What the Tax Applies To
South Carolina Code § 6-1-710 defines the tax as one on “prepared meals and beverages sold in establishments,” along with sales at places licensed to serve alcohol on-site. The operative word is prepared. Any food a business has cooked, heated, assembled, or otherwise readied for immediate consumption falls within the tax: a made-to-order sandwich, a plate off a buffet, a cup of coffee. Beverages of every kind count, alcoholic or not, so long as they are served for consumption.
Raw groceries do not. A bag of flour, a carton of eggs, or uncut produce in original retail form are not prepared meals. The line is drawn at preparation. The moment a grocery store heats a rotisserie chicken or assembles a salad for the grab-and-go case, that item becomes taxable. Food trucks collect the tax the same as any brick-and-mortar restaurant in jurisdictions that have adopted it.
Rate and the 2% Combined Cap
Under § 6-1-720, a local governing body may impose the tax at up to 2% of food and beverage charges. A county cannot go above 1% inside the boundaries of a municipality unless that municipality’s governing body passes a resolution consenting to the higher rate.1South Carolina Legislature. South Carolina Code 6-1-720 – Imposition of Local Hospitality Tax
When both a county and a municipality tax the same area, the combined rate still cannot exceed 2%. Section 6-1-740 sets that ceiling. The only exception covers jurisdictions where the combined rate already exceeded 2%, or was authorized to exceed it, before December 31, 1996; those areas are grandfathered at whatever rate was in effect on that date.2South Carolina Legislature. South Carolina Code of Laws – Title 6 – Chapter 1 – General Provisions
Filing Frequency and Due Dates
How often you file depends on how much tax your business generates. Section 6-1-770 sets three tiers based on average monthly liability:2South Carolina Legislature. South Carolina Code of Laws – Title 6 – Chapter 1 – General Provisions
- Monthly filing when estimated average tax exceeds $50 per month.
- Quarterly filing when estimated average tax is between $25 and $50 per month.
- Annual filing when estimated average tax is less than $25 per month.
Most restaurants and bars fall into the monthly tier. Whatever your frequency, the prevailing local practice is that returns and payment are due by the 20th of the month following the reporting period. Charleston and Columbia both use a 20th-of-the-month deadline. Confirm your date with the office that issued your registration, because the deadline sits in the local ordinance rather than the state statute.
Late-Payment Penalties
Penalties are set by each local ordinance, and they vary. Charleston imposes a flat 25% penalty on any delinquent payment. Columbia charges 5% per month the tax remains unpaid. Other jurisdictions have their own schedules. There is no uniform statewide penalty, so check the ordinance that applies to your city or county before assuming any specific rate.
Registration and Recordkeeping
Before you begin collecting, register with the local finance or revenue office that administers the tax. Most jurisdictions provide a new-business registration form and will ask for your legal business name, physical address, and federal tax identification number. Some also require a copy of your South Carolina retail license or your state sales tax return (Form ST-3) alongside each hospitality tax payment.
Forms, submission methods, and supporting documents differ from one jurisdiction to the next. Some accept filings through an online portal; others still want a paper return and a check. Keep daily sales logs and point-of-sale reports that separate prepared-food and beverage sales from any non-taxable items. State law protects the confidentiality of what you submit. Section 6-1-120 makes it a misdemeanor for a local government employee to improperly disclose taxpayer data, punishable by up to a $1,000 fine and one year in jail.2South Carolina Legislature. South Carolina Code of Laws – Title 6 – Chapter 1 – General Provisions
Hospitality Tax vs. Accommodations Tax
These two often get confused. The hospitality tax applies to prepared food and beverages. The accommodations tax, administered by the South Carolina Department of Revenue under § 12-36-920, applies to short-term lodging rentals of fewer than 90 consecutive days. A hotel with a restaurant collects both: hospitality tax on dinner, accommodations tax on the room. If your business does food service and lodging, you have two separate obligations, potentially owed to two separate agencies.
Annexed Areas and Overlapping Jurisdictions
When a municipality annexes an area where the county already collects a hospitality tax, the county does not lose that revenue immediately. Under § 6-1-750, the municipality receives only the portion of new hospitality tax revenue that exceeds what the county collected in that same area over the previous twelve months.2South Carolina Legislature. South Carolina Code of Laws – Title 6 – Chapter 1 – General Provisions The practical effect for you is that after an annexation you may need to remit to a different office. Confirm your filing destination with both the county and the municipality during any transition.
How the Money Must Be Spent
Hospitality tax revenue is not general fund money. Section 6-1-730 restricts spending to eight tourism-related categories, including tourism-related buildings such as civic centers and coliseums, cultural and historic facilities, beach access and renourishment, roads and bridges serving tourist areas, tourism advertising, water and sewer infrastructure tied to tourism demand, flood control on tourism-related land, and site preparation for any of the above.3South Carolina Legislature. South Carolina Code 6-1-730 – Use of Revenue From Local Hospitality Tax Counties that collect at least $900,000 per year in state accommodations taxes may also use the money for day-to-day operation of those facilities, including police, fire, EMS, and emergency-preparedness services directly connected to them. Elsewhere, the funds are limited to capital projects. Using hospitality tax revenue for general government expenses is not allowed.